Microsoft engineers deliberately placed a file in some of the company's Internet-server software that could allow hackers to obtain Web site management files from thousands of sites, the software giant admitted yesterday after two security experts reported the flaw. The secret password violates Microsoft's policy and is a firing offense for the still unidentified programmers who wrote the code, said Microsoft security response center manager Steve Lipner. Microsoft will warn users through email and on its Web site to delete the file named "dvwssr.dll" that is installed on the company's Internet server software with Frontpage 98 extensions. Many Web sites use the software, and hackers could use the password to access site management files, which could lead to the discovery of information such as credit card numbers. The three-year-old software was written at the height of the browser wars between Microsoft and Netscape, and the illicit code includes a slur referring to Netscape engineers as "weenies." Security experts say the file is a major security threat, especially to commercial Internet-hosting providers.http://www.msnbc.com/news/394839.asp

Justice Department antitrust division chief Joel I. Klein appeared yesterday before the House Judiciary Committee to discuss the Microsoft case. Klein advised legislators that "Everyone would benefit from a toning down of the rhetoric and a greater faith in the court system to come to the right resolution." Nonetheless, lawmakers shared their opinions with Klein, with a number of Republicans supporting Microsoft's arguments. Republican Microsoft supporters said the case emphasized complaints from the company's rivals rather than consumer issues, and further argued that the case has become obsolete in the face of the dynamic software marketplace. Meanwhile, Rep. John Conyers Jr. (D-Mich.) insinuated that Republicans are using the case as "a fund-raising cash cow." Conyers also condemned Microsoft for running TV ads featuring Chairman Bill Gates in an effort to garner public support following the court's decision. The move was unprecedented and "incredible," Conyers said. Also yesterday, Sun Microsystems CEO Scott McNealy spoke with Senate Republicans about the Microsoft case, to balance Gates' meeting with GOP senators last week. http://www.washingtonpost.com/wp-dyn/print/business/inside/A693-2000Apr12.html

There is a growing concern among industry officials and employees that because any product connected to the Web is subject to Web-based attacks, future Internet-enabled systems, such as 911 switchboards or burglar alarms, could be at risk. Additionally, because hackers learn from their history and technology is advancing at an astonishing rate, the potential damage caused by an attack increases with every attempted system sabotage. A team of researchers at IBM is studying how to protect entire networks from attack using software sophisticated enough to detect a security threat, pinpoint the source, and apply remedies in real time. Many experts similarly believe that the best means of defense is to protect the Web infrastructure and are therefore working to secure ISPs and their networks. http://www.mediacentral.com/channels/search/04_12_2000.reutr-story-N12147565.html

Linux server shipments grew 166 percent to 72,422 units between the fourth quarter of 1998 and the fourth quarter of 1999, making Linux the most rapidly growing server platform, says an International Data (IDC) survey. In terms of shipments, Linux claimed about 6 percent of the total entry server market, but IDC predicts continued server growth for the open source operating system. Compaq accounted for 25 percent of 1999's fourth-quarter Linux server shipments with 18,088 units. In second place was IBM with 7,001 units, followed by Hewlett-Packard with 5,429 units. http://www.infoworld.com/cgi-bin/deleteframe.pl?story=/articles/pi/xml/00/04/10/000410pilinuxship.xml

Ireland, the largest exporter of software in Europe, faces a shortage of skilled IT workers and is working to solve the problem by changing immigration laws and providing training programs. Irish Prime Minister Bertie Ahern this week announced that 500 new jobs will be created by a Lucent Technologies expansion. However, the Irish IT industry already has trouble finding workers, and is expected to fall several thousand workers short of its requirements in the future, says industrial strategy agency Forfas. Addressing the shortage, deputy prime minister Mary Harney this week signed a software cooperation deal with India, the largest producer of IT workers. Irish-based companies Baltimore Technologies and PACE Software announced partnerships with Indian companies. Furthermore, Harney last week unveiled new immigration rules that allow non-European Union workers to acquire visas more easily. Meanwhile, Microsoft, IBM, and Hewlett-Packard, which have their European bases in Ireland, are planning to offer IT training to help ease the shortage.

Many online retailers are expected to fail due to competition and financing problems by the end of next year, predicts Forrester Research. Internet-only retailers are in the most precarious position, while catalog companies that have moved to the Web and traditional retailers with Web storefronts are in better shape. The National Retail Federation's Scott Silverman says, "The challenge for Internet-only retailers is to build a brand and a customer base." Although online retailers sold over $7 billion in goods during the 1999 holiday season, few were profitable. Still, Forrester says most online retailers say they do not expect to be profitable until 2002. Forrester says competition will drive consolidation in the industry, particularly for those sites selling software, music, and books. Furniture, apparel, and shoe retailers are in better position since their products are more differentiated. http://www.washingtontimes.com/business/daybook-2000413215759.htm

A federal judge has denied the ACLU's appeal of the recent court ruling involving Cyber Patrol and the "cphack" code-busting program. The ACLU had asked for a temporary stay of U.S. District Judge Edward Harrington's order that Web sites stop using the cphack program, but the judge ruled that the ACLU was not a party in the case and thus had no right to ask for the stay. The ACLU will likely take its battle to the U.S. Court of Appeals for the First Circuit, said ACLU attorney Chris Hansen. Harrington wrote that parents have the right to block Web sites in order to "screen and, thus, prevent noxious and insidious ideas from corrupting their children's fertile and formative minds."http://www.wired.com/news/print/0,1294,35660,00.html

The National Security Agency (NSA), viewed by many as a sinister and all-powerful intelligence body, continues to defend itself in the face of mounting criticism from U.S. and European privacy advocates. On April 12, the director of the NSA denied that the agency ever takes part in foreign economic espionage on behalf of U.S. corporations and explained that it will only snoop on Americans under strict conditions. Air Force Lt. Gen. Michael Hayden, who has been defending the agency from such accusations for about a year now, explained that if the NSA is ever compelled to eavesdrop, it must prove to a special court that the matter is relevant to national security. It must also prove that the target of the investigation is an agent of a foreign power, a spy, or a terrorist. Hayden said such surveillance requests occur about six times a year. However, in recent months the American Civil Liberties Union and other groups, along with a number of European officials, have accused the NSA of abuses stemming from the use of its Echelon spy system. The agency has been charged with using Echelon to sift through private emails, faxes, and telephone calls both at home and abroad. Some members of Congress are calling for new, tech-conscious legislation aimed at keeping the NSA more in check. The agency's use of its network of powerful listening stations is supposed to be reserved for tracking money laundering, weapons proliferation, and corporate corruption.

The three largest cell phone manufacturers in the world--Ericsson, Motorola, and Nokia--announced a partnership on Tuesday to create an open, international framework for secure e-commerce transactions via wireless handsets. The three encouraged industry peers to adopt their initiative. The companies perceive the encoding of data as vital for the expansion of virtual services. Ericsson estimates that there will be one billion cellular users worldwide by 2004. Presently, WAP phones offer no security protection against an unauthorized user. The solution uses such features as WTLS (Wireless Transport Layer Security) and WIM (Wireless Identification Module), which will serve as a personal identification license for e-commerce transactions and Internet access. The three companies plan to develop a digital signature that will become the industry protocol for authentication of wireless e-commerce transactions. Additional information about the project will be made available by the end on May on the companies' Web sites. The framework of the plan is expected this summer. http://dailynews.yahoo.com/h/nm/20000411/wr/tech_mobile_1.html

Almost three-fourths of large companies in the U.S. monitor their workers' use of communications technology, including Internet surfing, PC use, email, and phone calls, according to a survey released by the American Management Association on Wednesday. Workplace surveillance has drastically increased since 1999, when 45.1 percent of companies monitored their employees, the survey says. The number of companies that review employee email has tripled to 38 percent since 1997. In addition, 54 percent of respondents say they monitor Internet connections. Doug Fowler, president of PC monitoring software firm SpectorSoft, says 54 percent sounds too high and suggests that companies might be referring to filters and other ways of blocking sites rather than actual tracking of Internet use. Employers are concerned that misuse of technology reduces productivity and poses liability threats. Almost 20 percent of the survey's respondents say they have terminated workers for abusing technology, says the association. Although many workers believe their communications are private, companies are legally able to record and review email messages, phone calls, PC use, and Web surfing that take place on corporate equipment. http://www.pcworld.com/pcwtoday/article/0,1510,16252,00.html

The recent southward trend of European tech companies' stock prices is alienating investors and potential investors alike. The European market's ill fortune began March 14 when Lastminute.com held its IPO. The offering turned out to be a bust as Lastminute.com's stock fell well below its initial price, causing consternation among investors and casting doubt on the brand's potential for future growth. World Online (WOL) followed with its own flop just a few days later. The WOL offering, like the Lastminute.com offering, was greatly oversubscribed, prompting WOL founder Nina Brink to select the top listing price of 43 euros a share. The stock did well briefly before dropping precipitously. Brink's decision to sell two-thirds of her WOL shares three months prior to the offering--an occurrence that was not publicly brought to investors' attention until after the listing--did not help matters. Although she has declined to explain why she sold the shares, Brink has made it known she is sorry about "the commotion in the market." Contrition is not enough for the underwriting banks, which are calling for Brink's resignation, according to sources. The Dutch media reports that investors are preparing to launch lawsuits against the company and that the offering is being analyzed by Dutch banking and regulatory agencies. http://www.nytimes.com/library/tech/00/04/cyber/eurobytes/11eurobytes.html

A German court has ruled that AOL Germany is liable for the illegal trading of digital music files on its servers, a decision that could bolster the music industry's defense against piracy on the Internet. AOL Germany says it will appeal the decision, which stems from a lawsuit filed against the ISP by Hit Box, a German company that sells digital music files. "Total control of all pages on our servers is technically almost impossible," said AOL Germany's Alexander Adler, adding that such monitoring would also amount to censorship. The court's ruling underscores the need for ISP-introduced copyright-protection technologies, said Gema, Germany's top music licensing group. http://www.usatoday.com/life/cyber/tech/review/crh053.htm

The European Union on Tuesday proposed several measures designed to boost Europe's presence on the Internet. The EU's European Commission proposed a new top-level domain for Europe, dot-eu, and expressed the need for Europeans to have access to cheaper Internet connections. The EC also endorsed the concept of free and open elections for members of the board of the Internet Corporation for Assigned Names and Numbers (ICANN). Erkki Liikanen, the European Commissioner for the information society, said, "The Internet needs a light touch from the regulators, but a firm hand to ensure that its business-generating, job-creating potential is encouraged to the full." The EC says ICANN needs "transparent and secure" funding, but otherwise provided few details to back its proposals. http://www.totaltele.com/view.asp?ArticleID=26964&pub=tt&categoryid=0
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Rather than settle a Sherman Antitrust Act dispute with the U.S. government, Microsoft Chairman Bill Gates has chosen to focus most of the company's energies and efforts on its new Internet strategy. Apparently, the software giant sees the antitrust case as less of an issue than the threat of not being able to do business as it would like in an increasingly electronic world. In fact, a settlement with the government would likely have forced Microsoft to agree to the dictates of the government regarding the new features the company could integrate into Windows. In no way does Microsoft want the government telling it what belongs and what does not, the company's decision suggests. As a result, Microsoft moves closer to its one big Windows vision that essentially would run everything from notebook computers to huge servers. For many technology companies, this would mean that Microsoft has not changed at all. Microsoft plans to unveil its new Internet strategy, Next Generation Windows Services, in May. The company intends to connect Web sites, corporate servers, and desktop PCs together and to the Web by planting bits of software in versions of Windows. Nevertheless, Microsoft is taking a calculated risk by not accepting the government's olive branch. The company's stance may move Justice Department antitrust chief Joel I. Klein to seek a breakup of the company. There are some weaknesses in the government's position, however. One involves Judge Thomas Penfield Jackson's ruling on the legality of tying, and the other involves imposing remedies that fit the crime but do not look ahead to the Internet or corporate-enterprise markets. Ultimately, Microsoft can always contend that its alleged anti-competitive practices did not help it in handheld devices, high-end servers, and other new markets, which could result in a punishment that resembles the government's proposal in settlement talks. But Microsoft is likely to have its Internet strategy in place before the legal dispute is resolved.

Many dot-coms looking to cash in on business-to-business e-commerce are turning to customer relationship management (CRM). Kovair and trustedanswer.com are among the startups that entered the CRM market this week. On Monday, Kovair released hosted software that provides a single point of interaction for customers and partners to conduct business with a company's sales division. CRM covers a wide range of integration between sales and marketing processes, says Kovair's Eric Sternberg, adding that his company has taken the approach of offering direct interaction between the company and the customer. Kovair is now forming partner programs, and intends to target ASPs and Web integrators. ASPs that aggregate different applications could integrate Kovair's software into their own applications to offer a complete solution, says Sternberg. Meanwhile, systems integrators would back-end integrate Kovair's software into order entry and order status applications, enterprise resource planning software, and e-commerce software, says Sternberg. Another startup called trustedanswer.com debuted on Tuesday, launched by mainframe and storage maker Amdahl. Trustedanswer.com uses a Web-based self-service solution to offer hosted customer service and support. http://www.techweb.com/wire/story/TWB20000413S0015

Seeking to capitalize upon the need for Internet startups to become operational as soon as possible, such companies as Ariba, BroadVision, Commerce One, IBM, and Open Market have begun offering business-to-business (B2B) application packages to enable businesses to quickly build e-commerce Web sites. These packages often include such features as search engines, tax calculation, payment processing, security, order processing, auction capabilities, and customer personalization capabilities. The ongoing surge in B2B activity has even altered the focus of many companies' offerings; IBM, for example, has shifted from an emphasis upon e-commerce middleware platforms toward an emphasis upon e-commerce applications. The company recently bolstered its WebSphere Commerce product to include such features as a personalization engine and auction and payment management capabilities, and introduced a service provider version of WebSphere Commerce. Additionally, IBM last month announced a partnership that will allow Ariba to integrate IBM's WebSphere applications with its B2B e-commerce platform. Although B2B packages can be extremely useful, integration with other systems can be difficult and the costs of customizing packages to meet the needs of individual businesses can be quite high. Many analysts, therefore, recommend that companies thoroughly review each package to determine how well its applications, interoperability, and add-on commerce services meet both immediate corporate technological needs and long-term business goals. http://www.zdnet.com/intweek/stories/news/0,4164,2523632,00.html

Although brick-and-mortar companies have taken the time to familiarize themselves with e-commerce and believe they are now ready to move online, there are still several obstacles traditional companies must overcome in order to survive in today's digital economy. Restructuring existing business practices and learning how to act more quickly are perhaps the greatest challenges brick-and-mortar companies face in their e-commerce transformation. "Changing the flow of information changes the business model," says Raj Desai, director of the industrial sector of IBM's Worldwide Automotive Solutions division. Businesses should implement systems that can continuously monitor the status of shipments, taking into account value-added services and factors such as packaging methods, labeling, and shipping company. Also, the relationship between suppliers and distributors is likely to change. B2B companies typically do not carry inventory and instead collaborate with partners at all stages of the manufacturing process, creating products in a piecemeal, immediate fashion. Additionally, time-to-market affects e-business practices. Brick-and-mortar companies cannot afford to take the extra time to get everything right, but instead must use the knowledge of employees to get online as soon as possible. Some traditional companies have chosen to form separate dot-com businesses in order address these e-commerce challenges, while others have formed partnerships with other brick-and-mortar companies and also existing Internet companies. Despite the changes brick-and-mortar firms must implement now, some believe it will ultimately be the dot-coms, and not the traditional companies, that will be forced to significantly alter their practices in order to secure the customer loyalty and build the customer service infrastructure required to survive in the business world.

Although there are no definitive guidelines executives can refer to when directing an engineering firm's transition from 2D CAD software to 3D CAD software, Grove Worldwide's manager of engineering systems Stephen Schoonmaker offers some advice to help executives ensure the process is as beneficial and stress-free as possible. First, executives must understand they simply cannot anticipate and plan for all of the problems that might arise during the shift from 2D CAD to 3D CAD, and instead should be prepared to discover appropriate ways to customize the new CAD system both to the technical environment in which it will function and to the work habits of its users. Second, it is important for executives to realize that not everybody will be able to proficiently use 3D CAD and benefit from the program. These individuals often are confused by the mathematical concepts and logic-based sequencing upon which 3D modeling is based and will be more productive using alternative methods of design. Third, the use of 3D CAD may encourage more open, frequent communication among users because it is often much easier to intelligently discuss the design of an item when viewing a detailed physical model. Also, 3D CAD may help team members understand more clearly how each person's efforts relate to the project as a whole, thereby allowing individuals to work together more effectively and harmoniously. Finally, 3D CAD will dramatically reduce the amount of manufacturing errors that are made by enabling team members to discover design flaws long before a product is ever built or put to use. As a result, a firm will save time and money, boost profitability, and create a more productive staff.